TAM, SAM, & SOM Reports
For B2B SaaS
TAM (Total Addressable Market), SAM (Serviceable Addressable Market), and SOM (Serviceable Obtainable Market) are key indicators that help you understand your SaaS business’s market size and potential revenue. A detailed analysis covering all three of these market metrics is critical to making informed decisions and strategic plans for your B2B SaaS business.
TAM, SAM, and SOM – What’s the difference?
- TAM (Total Addressable Market) – Total market size for your product or service.
- SAM (Serviceable Addressable Market) – Portion of the market you can reasonably acquire based on your business model aka your target market.
- SOM (Serviceable Obtainable Market) – Percentage of your SAM that you can realistically capture.
The total addressable market (TAM) differs drastically from the serviceable addressable market. For example, the TAM could be millions of customers, but customers have such a high system change cost that they never churn from their current system, no matter how great the alternative system might be.
An example of when the serviceable addressable market might differ wildly from the serviceable obtainable market is when the SAM has millions of customers, but your business model or business capacity limits you to capturing business from a few thousands clients.
A TAM, SAM, or SOM Report Will Help Answer the Following Questions:
- Is the market size big enough to make the investment worth pursuing?
- Is the market expanding or contracting?
- What market portion can we realistically obtain, and how quickly?
- What is the likelihood that the business will make enough money fast enough to make it financially viable?
- What are the TAM, SAM, and SOM regarding revenue potential and (if possible) customer count?
Understanding TAM, SAM, and SOM metrics is crucial for any SaaS business. This knowledge lets you assess your business’s market share and potential growth opportunities. Analyzing these metrics allows you to make data-driven decisions, allocate resources effectively, and develop targeted strategies to maximize your success.
Our Approach to TAM, SAM, & SOM Reports
At JHMG, we take a personalized approach to creating the TAM, SAM, and SOM Reports for your SaaS business. Personalization is key, as the data needed to create these essential, business-guiding reports often differs between different B2B SaaS products.
As part of our TAM, SAM, & SOM report generation services, we offer the following:
- Data Sourcing: Our consultants do their best to find free sources of accurate and highly relevant data. However, obtaining thorough data from the best sources is often costly. Though any data purchase decisions are ultimately up to you, our team will help you determine if buying data from a third-party source is worth the cost.
- ROI Calculations: We also understand the importance of ROI calculations in your decision-making process. Our comprehensive reporting includes ROI calculations, enabling you to assess the profitability and potential investment returns. With our expertise, you can make informed decisions, focus your resources wisely, and set achievable goals for your SaaS business.
- Additional Report Elements: When it makes sense, we may incorporate additional valuable elements into your TAM, SAM, and SOM report. These may include analyzing target markets, exploring the ease of growth and market penetration, and evaluating different scenarios, such as worst-case and ideal outcomes. By including these elements, our report enhances your understanding of market dynamics, enabling you to strategize effectively and drive business growth.
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